Article How to stay financially resilient when you’re part of the ‘sandwich generation’

Today, there’s around 1.4 million people in England and Wales that have caring responsibilities for both older and younger dependents.¹ If this sounds familiar, you’re likely one of many people who make up the ‘sandwich generation’.

Commonly aged between 45 to 64¹, the sandwich generation often provides financial assistance and physical care for their parents – but they also have children to look after. These additional responsibilities can be both costly and reduce your ability to take on paid work, making it harder to save long-term.

If you’re part of the sandwich generation, your financial planning might look different from older generations who, at your age, likely had fewer expenses and more to save for retirement. But it’s important to know that you’re not alone.

Here are some considerations to help you become financially resilient when you’re not just taking care of yourself, but others too.

1. Join up your financial planning with family members

We all have unique situations – there’s no one-size-fits-all approach to financial planning. Whatever your financial situation, being transparent with your spouse, partner, family or support unit can help. Talking about your plans – and back-up plans – could help you and your loved ones to make the future you want a reality.

If you manage finances collectively, make sure your planning considers all the current and future circumstances that could impact your family’s income as a whole. For example, if one of you becomes unable to work, or any future caring expenses for ageing parents. This might include speaking with working adult children or extended family living at home, to help them understand how they fit into your family’s wider financial goals.

2. Think long-term

Thinking ahead can help you plan how to best support your loved ones when they might need it most. Try writing a list of things you might want to save for or need to prepare for, like parents going into care, university fees or housing costs for your kids, and goals for your own future. While some people in the sandwich generation might have to consider working for longer or retiring later, it’s important to think about the lifestyle you want when you stop working.

Ask yourself what actions your 80-year-old self would be grateful for you taking now. A clear, long-term vision can motivate you to take positive and responsible steps for the future.

3. Review your budget

With a lot of things to save for, prioritising is key. You could set yourself mini targets to reach by certain points in time for different needs – these should be realistic in terms of your budget. Consider your income and how much you can afford to save each month. It might help to create different ‘pots’ for specific purposes or people. This could be anything from your own retirement, to funding further education, care, housing deposits, weddings and more. Read our budgeting methods article to find a planning method that best suits you.

You should also consider building an emergency fund for unexpected scenarios, like losing your job or a boiler breakdown. But it’s also important to factor in money for things you enjoy, and that give you purpose.

Talking to a financial adviser could help you understand how to balance your competing financial priorities – there’s likely to be a cost for this. If it’s something you’d like to consider, you can find an adviser through the Government’s MoneyHelper website,  or find out more about advice services supported by Aegon by visiting aegon.co.uk/origen.

Origen Financial Services Ltd is wholly owned by Aegon UK plc but operates independently to us.

4. Make sure you’re getting what you’re entitled to

Don’t miss out on any discounts or benefits. For example, households with children might be eligible for child benefit or free childcare hours, depending on your circumstances. If you’re providing care for any relatives or loved ones, there’s different government help that might be available, such as carer’s allowance and carer’s credit.

In the workplace, you’re entitled to one week unpaid carer’s leave every 12 months, subject to conditions.² You should check your employment contract in case your work offers any additional benefits or leave in this scenario. Some employers also offer discounts and deals through voucher schemes which might mean spending less on groceries or luxury items.

If your parents are still able to carry out babysitting duties, you might be able to pass over National Insurance credits to them to help boost their State Pension – find out more in our article.

5. Think smart when it comes to debt

Debt isn’t to be taken lightly, but it’s not always a bad thing either. Taking on a mortgage, for example, can give your family the stability of a place to grow and spend time together. But be careful with what kind of debt you’re taking on.

If you're struggling with debt or loan repayments, there are many sources of help out there, from Citizens Advice or local Credit Unions.

6. Don’t forget about yourself

It’s estimated that around 8% of the UK population were providing informal care in 2022-2023.³ If you’re one of them, remember to think about your own future, too.

People in mid-life who have caring responsibilities are more likely to reduce the amount of paid work they do so that they can provide care. But reducing your paid work might in turn reduce the amount you have in any workplace pension. It could also lessen your National Insurance contributions which influences your State Pension. Not sure how the State Pension works? Our article breaks down everything you need to know. 

Of course, speaking with a financial adviser ahead of reducing your paid work could help you see the bigger picture and still save for your future while supporting your loved ones.

7. Build a strong support system

Having a support network can help you through challenging times. This might include talking to friends and family, going to counselling, or speaking to people in similar situations through online forums or charities like CarersUK. Being open about your situation can help you to build long-term connections.

It’ll also empower you to get help if you need it and know where to find that assistance during difficult times.

Remember there are free, impartial places you can get financial guidance, like MoneyHelper and Citizen’s Advice.

Pulling together as a family

Even if you’re not a member of the ‘sandwich generation’ now, you could be in the future. But it’s not something to be feared. Looking after loved ones can be challenging, but rewarding. Encourage your family to come together to be a source of support and motivation for each other.

Remember to take care of yourself while also caring for others. Taking steps to strengthen your family’s financial wellbeing can help to build resilience in your own mental wellbeing, too. Use these tips to focus on your long-term plans, and your vision for yourself and your loved ones.

Learn more about the sandwich generation and other evolving factors impacting over 50s in our Second 50 report.